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HomeMy WebLinkAboutContract 46292 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipality organized under the laws of the State of Texas, and VICTORY PACKAGING, L.P., a Texas limited partnership ("Company"). RECITALS The City and Company hereby agree that the following statements are true and correct and constitute the basis upon which the City and Company have entered into this Agreement: A. Company is a leading provider of packaging solutions in North America. Company is seeking to expand its operations with a new production facility. In return for the economic development incentives set forth in this Agreement, Company is willing to lease real property currently owned by Fort Worth VP Partners, L.P. or from its the affiliate, successor or assigns thereof (collectively, "Owner") and located at 15101 Grand River Road in the City (the "Development Property"), as more specifically depicted and described in Exhibit"A", and to construct a new building of approximately 325,000 square feet located on the Development Property for use as a new distribution facility for Company's business operations, as more specifically described in Exhibit "B" (the "Required Improvements"). The lease between Owner and Company (the "Lease") will include terms and conditions consistent with those outlined in Exhibit "C". Exhibits "A", "B" and "C" are attached hereto and hereby made a part of this Agreement for all purposes. B. The Required Improvements will benefit the City by developing currently vacant land into a viable commercial operation with significant opportunities for employment and tax base growth. As recommended by the City's 2014 Comprehensive Plan, adopted by the City Council pursuant to Ordinance No. 21164-03-2014 (the "Comprehensive Plan"), and in accordance with Resolution No. 3716-03-2009, the City has established an economic development program pursuant to which the City will, on a case-by-case basis, offer economic incentives authorized by Chapter 380 of the Texas M Local Government Code that include monetary loans and grants of public money, as well _m, as the provision of personnel and services of the City, to businesses and entities that the < City Council determines will promote state or local economic development and stimulate rn business and commercial activity in the City in return for verifiable commitments from ® such businesses or entities to cause specific employment and other public benefits to be made or invested in the City(the 11380 Program"). K C. The City has determined that the feasibility of the proposed development described herein is contingent on Company's receipt of the Program Grants, as provided in this Agreement. The City Council has determined that the p rol2osed develo ment and Page 1 OFFICIAL RECORD Economic Development Program Agreement CITY SECRETARY between City of Fort Worth and Victory Packaging,L.P. CITY bV®�tTli, TX use of the Required Improvements will benefit and stimulate the local economy and that the 380 Program is an appropriate means to achieve this project. In addition, the City Council has determined that by entering into this Agreement the potential economic benefits that will accrue to the City under the terms and conditions of this Agreement are consistent with the City's economic development objectives, as outlined in the Comprehensive Plan. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. The City Council has found, and the City and Company hereby agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. 2. DEFINITIONS. In addition to other terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital B. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Company. For purposes of this definition, "control" means fifty percent(50%) or more of the ownership determined by either value or vote. Base Grant Percentage has the meaning ascribed to it in Section 6.1. Central City means the area of the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG")-eligible census block groups; (ii) all enterprise zones, designated as such pursuant to the Texas Enterprise Zone Act, Chapter 2303, Subchapter F of the Texas Government Code; (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeters to CDBG-eligible block groups or enterprise zones, as well as any CDBG- eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map attached hereto as Exhibit "D", attached hereto and hereby made a part of this Agreement for all purposes. Page 2 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. Central City Employment Commitment has the meaning ascribed to it in Section 4.5.3. Central City Employment Percentage has the meaning ascribed to it in Section 6.6. Central City Resident means an individual whose principal place of residence is at a location within the Central City. Certificate of Completion has the meaning ascribed to it in Section 5. Completion Date means the date as of which all occupiable space within the Required Improvements has received a temporary or permanent certificate of occupancy. Completion Deadline means June 30, 2015. Development Personal Property Tax Revenues means City ad valorem taxes on New Taxable Tangible Personal Property located on the Development Property. The taxable appraised value of New Taxable Tangible Personal Property located on the Development Property for any given year will be established solely by the appraisal district that has jurisdiction over the Development Property at the time. Development Property has the meaning ascribed to it in Recital A. Development Real Property Tax Revenues means City ad valorem taxes on the Development Property and any improvements thereon minus the taxes attributable to the base collective taxable appraised value of all improvements located on the Development Property for the 2014 tax year, which base collective taxable appraised value is $1,390,602.00. The taxable appraised value of the Development Property and any improvements located thereon for any given year will be established solely by the appraisal district that has jurisdiction over the Development Property at the time. Director means the director of the City's Housing and Economic Development Department or his authorized designee. Effective Date has the meaning ascribed to it in Section 3. Fort Worth Certified M/WBE Company means a minority- or woman-owned business that (i) has received certification as either a minority business enterprise (MBE), a woman business enterprise (WBE) or a disadvantaged business enterprise (DBE) by the North Central Texas Regional Certification Agency (NCTRCA); (ii) has a principal business office located within the corporate limits of the City that performs a commercially useful function; and(iii) has provided from such office the services or sales that Company is seeking to have counted under this Agreement. Page 3 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. e Fort Worth Construction Percentage has the meaning ascribed to it in Section 6.2. Fort Worth Construction Spending Commitment has the meaning ascribed to it in Section 4.4.1. Fort Worth Employment Commitment has the meaning ascribed to it in Section 4.5.2. Fort Worth Employment Percentage has the meaning ascribed to it in Section 6.5. Fort Worth Resident means an individual whose principal place of residence is at a location within the corporate limits of the City. Fort Worth Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.6.1. Fort Worth Supply and Service Spending Percentage has the meaning ascribed to it in Section 6.7. Full-time Job means a job provided to one (1) individual by Company for at least forty(40) hours per week. Hard Construction Costs means the following costs expended directly for the Required Improvements: actual site development and construction costs; contractor and subcontractor fees; costs of supplies and materials; engineering fees; architectural fees; environmental and geotechnical study costs and design. For removal of doubt, property acquisition costs are specifically excluded from "Hard Construction Costs." Lease has the meaning ascribed to it in Recital A. M/WBE Construction Percentage has the meaning ascribed to it in Section 6.3. NMBE Construction Spending Commitment has the meaning ascribed to it in Section 4.4.2. M/WBE Supply and Service Percentage has the meaning ascribed to it in Section 6.8. M/WBE Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.6.2. New Taxable Tangible Personal Property means any personal property that (i) is subject to ad valorem taxation by the City; (ii) is located on the Development Property; Page 4 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. (iii) is owned or leased by Company; and (iv) was not located in the City prior to the Effective Date of this Agreement. Overall Employment Commitment has the meaning ascribed to it in Section 4.5.1. Overall Employment Percentage has the meaning ascribed to it in Section 6.4. Personal Property Commitment has the meaning ascribed to it in Section 4.3. Program Grants means the annual economic development grants paid by the City to Company in accordance with this Agreement and as part of the 3 80 Program. Program Source Funds means an amount of City funds available for inclusion in a given Program Grant, which will equal a percentage (calculated in accordance with this Agreement) of the Development Real Property Tax Revenues, plus a percentage (calculated in accordance with this Agreement) of the Development Personal Property Tax Revenues received by the City during the Twelve-Month Period ending in the same year in which the Program Grant is payable; provided, however, that if the Lease is amended or interpreted by the parties thereto, so that at any time during a given Twelve- Month Period Company is not required to pay or reimburse to the landlord all real property taxes on the Development Property and all improvements thereon, the Program Source Funds available for the Program Grant payable in the same year as the year in which such Twelve-Month Period ends will equal only a percentage (calculated in accordance with this Agreement) of the Development Personal Property Tax Revenues received by the City during that Twelve-Month Period. Real Property Commitment has the meaning ascribed to it in Section 4.2. Records has the meaning ascribed to it in Section 4.9. Required Improvements has the meaning ascribed to it in Recital A. Supply and Service Expenditures means all expenditures by Company expended directly for the operation and maintenance of the Required Improvements and the Development Property, excluding amounts paid for electric, gas, water and any other utility services as well as any amounts paid for temporary direct labor on the Development Property, unless such labor is for services rendered to Company, by example, security services or janitorial services. Term has the meaning ascribed to it in Section 3. Twelve-Month Period means the period between February 1 of a given year and January 31 of the following year. Page 5 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 3. TERM. This Agreement shall be effective as of the date of execution by both parties (the "Effective Date") and, unless terminated earlier pursuant to and in accordance with this Agreement, shall expire on the date as of which the City has paid all Program Grants required hereunder(the "Term"). 4. COMPANY OBLIGATIONS AND COMMITMENTS. 4.1. Use of Development Property. Company must use the Development Property as a distribution facility for Company's business operations throughout the Term of this Agreement. 4.2. Real Property Improvements. Company must expend or cause to be expended at least Twelve Million Dollars ($12,000,000.00) in Hard Construction Costs for the Required Improvements by the Completion Date, and the Completion Date must occur on or before the Completion Deadline (collectively, the "Real Property Commitment"). 4.3. Personal Property Improvements. Company covenants and agrees that New Taxable Tangible Personal Property having a value of at least Five Hundred Thousand Dollars ($500,000.00) must be in place on the Development Property by January 1, 2016, as determined solely by the appraisal district having jurisdiction over the Development Property at that time (the "Personal Property Commitment"). 4.4. Construction Spending Commitments 4.4.1. Construction Spending with Fort Worth Companies. Company must expend or cause to be expended by the Completion Date the greater of at least (i) Three Million Six Hundred Thousand Dollars ($3,600,000.00) in Hard Construction Costs for the Required Improvements or (ii) thirty percent (30%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Hard Construction Costs, with Fort Worth Companies (the "Fort Worth Construction Spending Commitment"). Page 6 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. a 4.4.2. Construction Spending with Fort Worth Certified M/WBE Companies. Company must expend or cause to be expended by the Completion Date the greater of at least (i) Three Million Dollars ($3,000,000.00) in Hard Construction Costs for the Required Improvements or (ii) twenty- five percent (25%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Hard Construction Costs, with Fort Worth Certified M/WBE Companies (the "M/WBE Construction Spending Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of measuring the Fort Worth Construction Spending Commitment. 4.5. Employment Commitments. Determination each year of compliance with the following employment commitments will be based on the employment data provided to the City pursuant to Section 4.7.3 for the year under evaluation. 4.5.1. Overall Employment. From and at all times after the Completion Deadline, Company must provide and fill at least 60 Full-time Jobs on the Development Property(the"Overall Employment Commitment"). 4.5.2. Employment of Fort Worth Residents. From and at all times after the Completion Deadline, Company must provide and fill at least the greater of (i) 9 Full-time Jobs or (ii) fifteen percent (15%) of all Full-time Jobs on the Development Property, regardless of the total number of Full-time Jobs provided and filled on the Development Property, with Fort Worth Residents (the "Fort Worth Employment Commitment"). Full-time Jobs held by Fort Worth Residents will also count as Full-time Jobs for purposes of measuring the Overall Employment Commitment outlined in Section 4.5.1. 4.5.3. Employment of Central City Residents. From and at all times after the Completion Deadline, Company must provide and fill at least the greater of(i) 3 Full-time Jobs or (ii) five percent (5%) of all Full-time Jobs on the Development Property, regardless of the total number of Full-time Jobs provided and filled on the Development Property, with Central City Residents (the "Central City Employment Commitment"). Full-time Jobs held by Central City Residents will also count as Full-time Jobs for purposes of measuring the Page 7 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. Overall Employment Commitment outlined in Section'4.5.1 and the Fort Worth Employment Commitment outlined in Section 4.5.2. 4.6. Supply and Service Spending Commitments. 4.6.1. Supply and Service Expenditures with Fort Worth Companies. Beginning in calendar year 2015, and in each calendar year thereafter during the Term of this Agreement, Company annually must expend at least Five Hundred Thousand Dollars ($500,000.00) in Supply and Service Expenditures with Fort Worth Companies (the "Fort Worth Supply and Service Spending Commitment"). 4.6.2. Supply and Service Expenditures with Fort Worth Certified M/WBE Companies. Beginning in calendar year 2015, and in each calendar year thereafter during the Term of this Agreement, Company annually must expend at least One Hundred Thousand Dollars ($100,000.00) in Supply and Service Expenditures with Fort Worth Certified M/WBE Companies (the "M/WBE Supply and Service Spending Commitment"). Dollars spent with Fort Worth Certified M/WBE Companies will also count as dollars spent with Fort Worth Companies for purposes of measuring the Fort Worth Supply and Service Spending Commitment outlined in Section 4.6.1. 4.7. Reports and Filings. 4.7.1. Final Construction Spending Report. Within sixty (60) calendar days following the Completion Date, in order for the City to assess whether Company expended or caused to be expended at least Twelve Million Dollars ($12,000,000.00) in Hard Construction Costs for the Required Improvements by the Completion Date, and the extent to which the Fort Worth Construction Spending Commitment and the M/WBE Construction Spending Commitment were met, Company must provide the Director with a report in a form reasonably acceptable to the Director that specifically outlines (i) the total Hard Construction Costs expended or caused to be expended for the Required Improvements as of the Completion Date; (ii) the total Hard Construction Costs expended or caused to be expended with Fort Worth Companies for the Required Improvements as of the Completion Date; and (iii) the total Hard Construction Costs expended or caused to be expended with Fort Worth Certified M/WBE Companies for the Required Page 8 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. Improvements as of the Completion Date, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid, including, without limitation, final lien waivers signed by the general contractor for the Required Improvements. 4.7.2. Personal Property Report. In order for the City to track its obligations under this Agreement, Company will notify the Director in writing once it believes that the Personal Property Commitment has been attained. 4.7.3. Annual Employment Report. On or before February 1, 2016 and February 1 of each year thereafter, in order for the City to assess the degree to which the Overall Employment Commitment for the previous calendar year, the Fort Worth Employment Commitment for the previous calendar year, and the Central City Employment Commitment for the previous calendar year were met, Company must provide the Director with a report in a form reasonably acceptable to the Director that sets forth the total number of individuals, Fort Worth Residents, and Central City Residents who held Full-time Jobs on the Development Property, all as of June 30 (or such other date requested by Company and reasonably acceptable to the City) of the previous year, together with reasonable supporting documentation. 4.7.4. Annual Supply and Service Spending Report. On or before February 1, 2016 and February 1 of each year thereafter, in order for the City to assess the degree to which the Fort Worth Supply and Service Spending Commitment and the M/WBE Supply and Service Spending Commitment were met in the previous calendar year, Company must provide the Director with a report in a form reasonably acceptable to the Director that sets forth the aggregate Supply and Service Expenditures made during such calendar year with Fort Worth Companies and with Fort Worth Certified M/WBE Companies. 4.8. Inspections of Development Property and the Lease. At any time during Company's normal business hours throughout the Term and following reasonable notice to Company, the City shall have the right to inspect and evaluate the Development Property and any improvements thereon, including the Required Improvements, and Company will provide full access to the same, in order for the City to monitor compliance with the terms and conditions of this Agreement. Company will cooperate fully with the City during any such inspection and evaluation. Notwithstanding the foregoing, Company shall have the right to require that any representative of the City be escorted by a Page 9 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. representative or security personnel of Company during any such inspection and evaluation. In addition, upon request of the City at any time during the Term and following reasonable advance notice, Company will make available a copy of the Lease in effect at the time (as certified in writing by a duly authorized officer of Company) for review by the City to ensure compliance under this Agreement. 4.9. Audits. The City will have the right throughout the Term to audit the financial and business records of Company or any Affiliate that relate to the Required Improvements and the Development Property as well as any other documents necessary to evaluate Company's compliance with this Agreement or with the commitments set forth in this Agreement (collectively "Records"). Company must make all Records available to the City on the Development Property or at another location in the City acceptable to both parties following reasonable advance notice by the City and will otherwise cooperate fully with the City during any audit. 5. CERTIFICATE OF COMPLETION. Within ninety (90) calendar days following receipt by the City of the final construction spending report for the Required Improvements submitted in accordance with Section 4.7.1, and assessment by the City of the information contained therein pursuant to Sections 4.8 and 4.9, if the City is able to verify attainment of the Real Property Commitment set forth in Section 4.2 (that is, that Company expended or caused to be expended at least Twelve Million Dollars ($12,000,000.00) in Hard Construction Costs for the Required Improvements by the Completion Date, and that the Completion Date occurred on or before the Completion Deadline), the Director will issue Company a certificate stating the amount of Hard Construction Costs expended for the Required Improvements, and the amounts of such Hard Construction Costs expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies (the "Certificate of Completion"). The Certificate of Completion will also serve as the basis for determining the extent to which the Fort Worth Construction Spending Commitment and the M/WBE Construction Spending Commitment were met. 6. PROGRAM GRANTS. As more specifically set forth herein, if both the Real Property Commitment set forth in Section 4.2 and the Personal Property Commitment set forth in Section 4.3 are met, Company will be entitled to receive ten (10) annual Program Grants, payment of which will begin in 2016 and end in 2025. The amount of each Program Grant will equal a percentage of the Program Source Funds available for that Program Grant, which percentage will be based on the extent to which the various commitments set forth in Section 4 were met and, specifically, will equal the sum of the Base Grant Percentage, the Page 10 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. Fort Worth Construction Percentage, the M/WBE Construction Percentage, the Overall Employment Percentage, the Fort Worth Employment Percentage, the Central City Employment Percentage, the Fort Worth Supply and Service Percentage and the M/WBE Supply and Service Percentage, as defined in Section 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8. In no event will any Program Grant exceed fifty percent (50%) of the Program Source Funds available for that year's Program Grant. 6.1. Attainment of Real Property Commitment and Personal Property Commitment (20%). Provided that the City is able to verify that both the Real Property Commitment set forth in Section 4.2 and the Personal Property Commitment set forth in Section 4.3 were met, each annual Program Grant will include twenty percent (20%) of the Program Source Funds available for that year's Program Grant(the"Base Grant Percentage"). 6.2. Fort Worth Construction Spending Commitment(Up to 5%). A percentage of each Program Grant will be based on the extent to which the Fort Worth Construction Spending Commitment, as outlined in Section 4.4.1, was met (the "Fort Worth Construction Percentage"). The Fort Worth Construction Percentage will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Construction Spending Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Companies by the number of dollars comprising the Fort Worth Construction Spending Commitment, as determined in accordance with Section 4.4.1. For example, if Company expended or caused to be expended $4,000,000.00 in Hard Construction Costs for the Required Improvements, the Fort Worth Construction Spending Commitment would be $3,600,000.00. If only $2,880,000.00 in Hard Construction Costs for the Required Improvements were expended for the Required Improvements by the Completion Date with Fort Worth Companies, the Fort Worth Construction Percentage would be 4% instead of 5% (or .05 x [$2.88 million/$3.6 million], or .05 x .80, or .04). If the Fort Worth Construction Spending Commitment was met or exceeded, the Fort Worth Construction Percentage will be five percent (5%). 6.3. M/WBE Construction Spending Commitment A percentage of each Program Grant will be based on the extent to which the M/WBE Construction Spending Commitment, as outlined in Section 4.4.2, was met (the "M/WBE Construction Percentage"). The M/WBE Construction Percentage will equal the product of five percent (5%) multiplied by the percentage by which the M/WBE Construction Spending Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Certified Page I I Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. M/WBE Companies by the number of dollars comprising the M/WBE Construction Spending Commitment, as determined in accordance with Section 4.4.2. If the M/WBE Construction Spending Commitment was met or exceeded, the M/WBE Construction Percentage will be five percent (5%). 6.4. Overall Employment Commitment (Up to 10%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Overall Employment Commitment in the previous calendar year, as outlined in Section 4.5.1 (the "Overall Employment Percentage"). The Overall Employment Percentage for each Program Grant will equal the product of ten percent (10%) multiplied by the percentage by which the Overall Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Jobs provided and filled on the Development Property in the previous calendar year by sixty (60), which is the minimum number of Full-time Jobs that must be provided and filled on the Development Property in order to meet the Overall Employment Commitment. For example, if in a given year only 48 Full-time Jobs were provided and filled on the Development Property, the Overall Employment Percentage for the Program Grant payable in the following year would be 8% instead of 10% (or .10 x [48/60]), or .10 x .80, or .08. If the Overall Employment Commitment is met or exceeded in any given year, the Overall Employment Percentage applicable the Program Grant payable in the following year will equal ten percent (10%). 6.5. Fort Worth Employment Commitment (Up to 2.5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Fort Worth Employment Commitment in the previous calendar year, as outlined in Section 4.5.2 (the "Fort Worth Employment Percentage"). The Fort Worth Employment Percentage for each Program Grant will equal the product of two and one-half percent (2.5%) multiplied by the percentage by which the Fort Worth Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Jobs provided on the Development Property that were filled by Fort Worth Residents in the previous calendar year by the applicable number of Full- time Jobs constituting the Fort Worth Employment Commitment for the previous calendar year, as outlined in Section 4.5.2. For example, if 80 Full-time Jobs were provided and filled on the Development Property in a given calendar year, under Section 4.5.2 the Fort Worth Employment Commitment for that year would be 12 Full-time Jobs (15% of 80 Full-time Jobs). However, if only 60 Full-time Jobs provided on the Development Property in that year were filled with Fort Worth Residents, the Fort Worth Employment Percentage for the Program Grant payable in the following year would be 1.875% instead of 2.5% (or .025 x [60/80]), or .025 x .75, or .01875. If the Fort Worth Employment Commitment is Page 12 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. i met or exceeded in any given year, the Fort Worth Employment Percentage applicable the Program Grant payable in the following year will equal two and one-half percent(2.5%). 6.6. Central City Employment Commitment(Up to 2.5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Central City Employment Commitment in the previous calendar year, as outlined in Section 4.5.3 (the "Central City Employment Percentage"). The Central City Employment Percentage for each Program Grant will equal the product of two and one-half percent (2.5%) multiplied by the percentage by which the Central City Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Jobs provided on the Development Property that were filled by Central City Residents in the previous calendar year by the applicable number of Full- time Jobs constituting the Central City Employment Commitment for the previous calendar year, as outlined in Section 4.5.3. If the Central City Employment Commitment is met or exceeded in any given year, the Central City Employment Percentage applicable to the Program Grant payable in the following year will equal two and one-half percent (2.5%). 6.7. Fort Worth Supply and Service Spending(Up to 2.5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Fort Worth Supply and Service Spending Commitment in the previous calendar year, as outlined in Section 4.6.1 (the "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and Service Percentage for each Program Grant will equal the product of two and one-half percent (2.5%) multiplied by the percentage by which the Fort Worth Supply and Service Commitment was met in the previous calendar year, which will be calculated by dividing the amount of Supply and Service Expenditures made with Fort Worth Companies in the previous calendar year by $500,000.00, which constitutes the Fort Worth Supply and Service Commitment for each year, as outlined in Section 4.6.1. For example, if Company made only $425,000.00 in Supply and Service Expenditures with Fort Worth Companies in a given year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the following year would be 2.125% instead of 2.5% (or .025 x [$425,000/$500,000]), or .025 x .85, or .02125. If the Fort Worth Supply and Service Commitment is met or exceeded in any given year, the Fort Worth Supply and Service Percentage applicable to the Program Grant payable in the following year will equal two and one-half percent (2.5%). Page 13 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 6.8. Fort Worth M/WBE Supply and Service Spending (Up to 2.5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the M/WBE Supply and Service Spending Commitment in the previous calendar year, as outlined in Section 4.6.2 (the "M/WBE Supply and Service Percentage"). The M/WBE Supply and Service Percentage for each Program Grant will equal the product of two and one-half percent (2.5%) multiplied by the percentage by which the M/WBE Supply and Service Commitment was met in the previous calendar year, which will be calculated by dividing the amount of Supply and Service Expenditures made with Fort Worth Certified M/WBE Companies in the previous calendar year by $100,000.00, which constitutes the M/WBE Supply and Service Commitment for each year, as outlined in Section 4.6.2. If the M/WBE Supply and Service Commitment is met or exceeded in any given year, the M/WBE Supply and Service Percentage applicable the Program Grant payable in the following year will equal two and one-half percent(2.5%). 6.9. No Offsets. A deficiency in attainment of one commitment may not be offset by the exceeding attainment of another commitment. For example, if in a given year the Central City Employment Commitment failed to be met by six (6) Full-time Jobs, but the Fort Worth Employment Commitment was exceeded by six (6) Full-time Jobs, the Central City Employment Percentage applicable to the Program Grant payable in the following year would still be reduced in accordance with Section 6.6 on account of the failure to meet the Central City Employment Commitment. 6.10. Deadline for Payments and Source of Funds. The first Program Grant payable hereunder shall be paid by the City on or before August 1, 2016. Each subsequent annual Program Grant payment will be made by the City to Company on or before June 1 of the year in which such payment is due. It is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from ad valorem taxes on the Development Property or improvements thereon or on New Taxable Tangible Personal Property that are received by the City. Company understands and agrees that any revenues of the City other than those dedicated for payment of a given annual Program Grant pursuant to and in accordance with this Agreement may be used by the City for any lawful purpose that the City deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for calculating the amount of any future Program Grant or other obligation to Company. Page 14 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 7. ADDITIONAL 380 PROGRAM BENEFITS. 7.1. Fee Credit. Company has paid an economic development incentive application fee of $5,000.00. From this fee, the City will give Company a credit of$3,000.00 that Company may apply toward any fees charged by the City in connection with the Required Improvements on or before June 30, 2015. After June 30, 2015, any unused balance of this credit will be refunded to Company within thirty(30) days following receipt of a written request from Company. 7.2. Waiver of Certain Fees After Fee Credit Exhausted. Company and its contractors will be required to apply for and receive all permits and other licenses and certificates required by the City with respect to construction of the Required Improvements. However, as further consideration for the public purposes that will be achieved from construction of the Required Improvements and as part of the 380 Program hereunder, unless otherwise prohibited by applicable law, ordinance, rule or regulation, and provided that Company has fully used the entire $3,000.00 fee credit set forth in Section 7.1, the City agrees to waive the following fees related to the Required Improvements that would otherwise be charged by the City at any time on or before June 30, 2015: (i) all building permit, plan review, inspection, and re-inspection fees; (ii) all zoning fees; (iii) all temporary encroachment fees; (iv) all platting fees; and (v) all fire, sprinkler, and alarm permit fees. All other fees charged or assessed by the City in accordance with applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, transportation impact fees and water and sewer impact fees, are not waived hereunder and shall be fully payable by Company and its contractors. 8. DEFAULT,TERMINATION AND FAILURE BY COMPANY TO MEET VARIOUS DEADLINES AND COMMITMENTS. 8.1. Failure to Meet Real Property Commitment or Personal Property Commitment. Notwithstanding anything to the contrary herein, the City shall have the right to terminate this Agreement immediately upon provision of written notice to Company, without further obligation to Company hereunder, if the Real Property Commitment, as outlined in Section 4.2, or the Personal Property Commitment, as outlined in Section 4.3, are not met. Page 15 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 8.2. Failure to Use Development Property for Business Purposes. If Company fails to use the Development Property as a distribution facility for Company's business operations for more than ninety (90) consecutive calendar days at any time during the Term of this Agreement for any reason (other than on account of Company's temporary displacement caused by a casualty to the Development Property and resulting ongoing repairs or restoration to the Development Property necessitated by such casualty), Company shall be in default under this Agreement and Section 8.6 shall apply. 8.3. No Default for Amendment of Lease; Adiustment of Program Source Funds. If the Lease is amended or interpreted by the parties thereto in any way, or any other arrangement is instituted between the parties, so that at any time during a given Twelve-Month Period Company is not required to pay or reimburse to the landlord all real property taxes on the Development Property and all improvements thereon, an event of default shall not occur under this Agreement, but, in accordance with the definition of "Program Source Funds" set forth in Section 2, the Program Source Funds available for the Program Grant payable in the same year as the year in which such Twelve-Month Period ends shall equal only the Development Personal Property Tax Revenues received by the City during that Twelve-Month Period, and all Development Real Property Tax Revenues received by the City during that Twelve-Month Period shall be excluded from the calculation of that Program Grant and may be used by the City for any other lawful purpose. 8.4. No Default for Failure to Meet Fort Worth and M/WBE Construction Spending Commitments, Employment Commitments or Supply and Service Spending Commitments. If the: (i) Fort Worth Construction Spending Commitment; (ii) the M/WBE Construction Spending Commitment; (iii) the Overall Employment Commitment; (iv) the Fort Worth Employment Commitment; (v) the Central City Employment Commitment; (vi) the Fort Worth Supply and Service Spending Commitment; or (vii) the M/WBE Supply and Service Spending Commitment are not met in any given year, such failure shall not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only cause the amount of the Program Grant that the City is required to pay in the following year to be reduced in accordance with this Agreement. 8.5. Failure to Submit Reports. If Company fails to submit any report required by and in accordance with Section 4.7, within thirty(30) days of written notice of such failure from the City, the City's obligation to pay any Program Grants at the time, if any, shall be Page 16 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. suspended until Company has provided all required reports; provided, however, that if any report required hereunder is delinquent by more than one (1) year, Section 8.6 shall apply. 8.6. General Breach. Unless stated elsewhere in this.Agreement, Company shall be in default under this Agreement if Company breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the City referencing this Agreement and all applicable grace periods (or, if Company has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the City shall have the right to terminate this Agreement immediately by providing written notice to Company. 8.7. Knowing Employment of Undocumented Workers. Company acknowledges that the City is required to comply with Chapter 2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Company hereby certifies that Company, and any branches, divisions, or departments of Company, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Company, or any branch, division, or department of Company, is convicted of a violation under 8 U.S.C. Section 1324a(fi (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): • if such conviction occurs during the Term of this Agreement, this Agreement shall terminate contemporaneously upon such conviction (subject to any appellate rights that may lawfully be available to and exercised by Company) and Company shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of the Program Grants received by Company hereunder, if any,plus Simple Interest at a rate of four percent (4%)per annum; or • if such conviction occurs after expiration or termination of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by Company, Company shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of the Program Grants received by Company hereunder, if any,plus Simple Interest at a rate of four percent (4%)per annum. Page 17 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. For the purposes of this Section 8.7, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Program Grants paid hereunder. This rate of interest can be applied each year, but will only apply to the aggregate amount of Program Grants paid hereunder and is not applied to interest calculated. For example, if the aggregate amount of the Program Grants paid hereunder is $10,000 and such amount is required to be paid back with four percent (4%) interest five years later, the total amount would be $10,000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 8.7 does not apply to convictions of any subsidiary or affiliate entity of Company, by any franchisees of Company, or by a person or entity with whom Company contracts. Notwithstanding anything to the contrary herein, this Section 8.7 shall survive the expiration or termination of this Agreement. 9. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Company shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Company shall have the exclusive right to control all details and day-to-day operations relative to the Required Improvements and the Development Property and any improvements thereon and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Company acknowledges that the doctrine of respondeat superior will not apply as between the City and Company, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Company. 10. INDEMNIFICATION. COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE REQUIRED IMPROVEMENTS AND Page 18 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. ANY OPERATIONS AND ACTIVITIES ON THE DEVELOPMENT PROPERTY OR OTHER WISE TO THE PERFORMANCE OF THIS A GREEMENT. 11. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: City: Company: City of Fort Worth Victory Packaging, L.P. Attn: City Manager Attn: Margaret Gay, Vice President— 1000 Throckmorton Real Estate Fort Worth, TX 76102 3555 Timmons Lane, Suite 1400 Houston, TX 77027 with copies to: the City Attorney and Economic Development Director at the same address 12. ASSIGNMENT AND SUCCESSORS. Company may at any time assign, transfer or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the City so long as Company, the Affiliate and the City first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Company under this Agreement. Otherwise, Company may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the City Council, which consent shall not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with the City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Company under this Agreement. Any attempted assignment without the City Council's prior consent shall constitute grounds for termination of this Agreement following ten(10) calendar days of receipt of written notice from the City to Company. Any lawful assignee or successor in interest of Company of all rights under this Agreement shall be deemed "Company" for all purposes under this Agreement. Page 19 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 13. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. 14. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of it governmental powers or immunities. 15. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 16. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas—Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. 17. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Company, and any lawful assign or successor of Company, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 18. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party,regardless of the actual drafter of this Agreement. Page 20 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. 19. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 20. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 21. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Company, and any lawful assign and successor of Company, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 22. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be [REMAINDER OF PAGE INTENTIONALLY BLANK] Page 21 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. considered an original,but all of which shall constitute one instrument. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: VICTORY PACKAGING, L.P. a Texas limited partnership: By:Victory Packaging Management, LLC, a Texas limited liability company and its gene artner: By: By: Fernando Costa enjamin Samuels Assistant City Manager Manager Date: /Z/23�4 Date: APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Deputy City Attorney M&C: C-26736 03-25-14; C-26793 05-06-14 if OR 0 0° l �'° o°°°�'o Ron-aid P. GonVadl c'>s,Asst City Se MIW E)C�►� 1§0- CORD ARY TX Page 22 Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. EXHIBITS "A"—Description and Map Depicting the Development Property "B"—Description of Required Improvements "C"—Lease Terms "D"—Map of Central City Economic Development Program Agreement between City of Fort Worth and Victory Packaging,L.P. FORT WORTH Victory Packaging 15101 Grand River Road } ` - Fort Worth, Texas 76155 ' _IRF'ORT c°o•' - - - 183' �'�_�•� _ '_ -,.°1.83 183 M/ ``fit � •..�, -- ti >F- � _ ri,. �,� �� ` j }_ rn FA.Aw I..� ..rti' ,'. .i r ,^•-; yr � 1., ��; ' ■,- 10111 IR ±Y' -��-�- ,,ice�;• �\� I _ - - • ;sb\J RR _may f Q °" GRAND RIVER ' �[7 . f �i r_ .. - .: '•N• �.' IT - -- '-¢=_•-_•- _ _ .l �°'= - Wiz, �� �;g• 'RO:C.K'ISLA�' r - �. -GF AND'FZI �EFZ "' `� p •.-_�"' ',( - ��. � ;� � ;� - HIGH RIVER K i . •. "i_. ,. -: �'' '�2 �.� �I^ .. SHADY GRO�VE�, {\ II .- _ft <� f Lll i _ ;: w _ . ,. TRINITjY 360 ZW SN � J +'€`. i �1 � �t•� � i l.��t'tii t ;.p y t y Copyright 2014 City of Fort Worth.Unauthorized reproduction is a violation of applicable laws.This product is for informational purposes and may not have been prepared for or be suitable for legal,engineering,or surveying purposes.It does not represent an on-the-ground survey and represents only the approximate relative location of property boundaries.The City of Fort Worth assumes no responsibility for the accuracy of said data. A N Exhibit "S" FACILITY DESCRIPTION SCOPE OF WORK FOR Victory Packaging Victory Packaging BTS 327,733 SF 15101 Grand River Road Fort Worth, Texas BUILDING SIZE AND LOCATION 327,733 SF concrete tilt-up wall panel, front-load building, with 32 foot clear height at first column line in from the loading dock area,located at 15101 Grand River Road in Fort Worth,Texas. OFFICE AREA ♦ 12,809 square feet of planned office space. CONCRETE TILT-UP WALLS ♦ Nominal panel thickness of 8". ♦ Clerestory windows, 5'x 8', shall be provided in every panel along the loading dock wall and north wall,a total of 80 units. STRUCTURAL.STEEL AND METALS ♦ Column spacing shall be 50' wide x 50' deep with 60' deep staging bays. ROOF STRUCTURE-60 mil TPO over R-20 roof insulation ♦ One layer of 3.3"ISO with R-Value 20.4,mechanically attached over steel deck. ♦ 60-mil single-ply TPO membrane, mechanically attached over the ISO, to achieve FMI-60 and local code requirements OVERHEAD DOORS ♦ 26 each Dock high doors to be 9'x 10'steel sectional doors with vision panels ♦ 2 Drive-In doors to be 12'x 14'steel sectional doors with vision panels and ramps DOCK EOUIPMENT ♦ Twenty-five(25)dock locations to include: • 6'W x 6'Long • 30,000 lb capacity manually operated dock levelers • Dock seals • Swing-arm lights • Z-Guard track protectors • Heavy Duty B410-14F dock bumpers MECHANICAL Fire Protection ♦ Provide wet pipe sprinkler systems designed and installed in accordance with NFPA 13,NFPA 20, and in accordance with the authority having jurisdiction requirements. All work will begin at 1 foot above finish floor in the fire pump room. 1 ♦ Shell Warehouse(314,854 SF):Provide wet pipe ESFR sprinkler systems at the roof level utilizing K16.8 (12 @ 52 psi)sprinklers. ♦ Office Area(12,809 SF):Provide light hazard occupancy wet pipe sprinkler system. ♦ Provide one electric motor driven fire pump, 1500 GPM, and required accessories to be located within the fire pump room. Warehouse Freeze Protection ♦ 9 ea Gas fired unit heaters with power vent,flue,and programmable thermostat. Mechanical Exhaust with Non-Rated Fans: (2 air changes per hour) ♦ 12 each 30,000 CFM roof mounted, low profile exhaust fans with roof curb,460V/3Ph/60, and 7.5 HP motor. ♦ 12 each 72" x 120" combination louvers with extruded aluminum construction, standard birdscreen,baked enamel finish,and 120 VAC operators. HVLS Fans ♦ 9 each 24'HVLS fans with one centrally located controller ELECTRICAL ♦ Specific electrical requirements associated with the proposed office space to be included as part of the Office Finish Allowance. Electrical Service ♦ Conduits and conductors for 2000 Amp Main Service provided. Lighting ♦ T5—8 lamp Fluorescent High-bay fixtures to provide 25 foot-candles at 36"above finish floor. 2 EXHIBIT "C" Lease Abstract Lease: Lease Agreement between Fort Worth VP Partners, L.P. and Victory Packaging, L.P. dated as of November 21, 2014 Lessor: Fort Worth VP Partners, L.P. Lessee: Victory Packaging, L.P. Premises: 15101 Grand River Road, Fort Worth, Texas Lease Term: 11/21/2014— 11/20/2024 Lease Commencement Date: 11/21/2014 Options to Extend: None Real Estate Taxes: Full Triple Net (NNN) Lease. Lessee pays all taxes for the Premises. T 1 1 i 1 820' ■,• r Ilk azo zo � :�I S] ��� ego 1•�Z:�ir zo' — Z.d► 20 •(�' 1 a� Legend 1 1 Boundary C> Central City Zip Codes Housing an• Economic Development CDBG Eligible C) City Limit CDBG Eligible e . i Central City X X City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 3/25/2014 -Amended by M&C C-26793 on 5/06/2014 DATE: Tuesday, March 25, 2014 REFERENCE NO.: C-26736 LOG NAME: 17EDPAVICTORY SUBJECT: Authorize Execution of an Economic Development Program Agreement with Victory Packaging, L.P., or an Affiliate for the Development of a New Production Facility Located at 15101 Grand River Road in the Centreport Business Park(COUNCIL DISTRICT 5) RECOMMENDATION: It is recommended that the City Council authorize the execution of an Economic Development Program Agreement with Victory Packaging L.P., or an affiliate for the development of a new production facility located at 15101 Grand River Road in the Centreport Business Park. DISCUSSION: The Housing and Economic Development Department is proposing a 10-year Economic Development Program Agreement with Victory Packaging L.P. (Company), or an affiliate that could provide 10 annual grants equal to 50 percent of the City's taxes on the incremental value of the real and business personal property investment at the site. Project: The Company is a leading provider of packaging solutions in North America. The Company has entered into an Agreement to construct a new production facility of approximately 325,000 square feet located at 15101 Grand River Road. The Company will invest a minimum amount of $12,000,000.00 in real property improvements and a minimum amount of$500,000.00 in business personal property improvements by June 30, 2015 (or earlier) for the construction of the new facility. The Company has entered into a lease-to-own arrangement with the current property owner. Failure to meet the $12,500,000.00 real and personal property investment by the completion deadline of June 30, 2015 is a condition of default and will result in immediate termination of the Agreement. Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Businesses (Real Property Improvements): The Company will be required to spend at least the greater of 30 percent or $3,600,000.00 of all hard construction costs for the improvements with contractors that are Fort Worth companies. The Company will also be required to spend at least the greater of 25 percent or $3,000,000.00 of all hard construction costs for the improvements with contractors that are Fort Worth Certified Minority/Women-Owned Business Enterprise companies (with the understanding that dollars spent with Fort Worth Certified M/WBE companies will also count as dollars spent with Fort Worth companies). Employment Commitments: The Company will employ a minimum of 60 Full-Time Employees (FTE's) on the property by June 20, 2015. The Company will fill the greater of 15 percent or 9 of the FTEs with Fort Worth residents and the greater of 5 percent or 3 of the FTEs with Fort Worth Central City residents (with the understanding that employment of Fort Worth Central City residents will also count as employment of Fort Worth residents). Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Businesses (Supply& Services : The Company will spend a minimum amount of$500,000.00 of annual discretionary service and supply expenditures with contractors that are Fort Worth contractors. The Company will spend a minimum amount of$100,000.00 of annual discretionary service and supply expenditures with contractors that are Fort Worth Certified M/WBE contractors (with the understanding that dollars spent with Fort Worth Certified M/WBE companies will also count as dollars spent with Fort Worth companies). Supply and Service Expenditures means all expenditures by the company expended directly for the operation and maintenance of the development, excluding amounts paid for electric, gas, water and any other utility services. Supply and Service Expenditures do not include expenditures for temporary direct labor at the facility. Except for cases of default, failure to meet a commitment will result in a reduction of the corresponding component of the grant for that year proportional to the amount the commitment was not met, or for the duration of the Agreement term in the case of construction commitments. City Commitments: All economic development grants awarded will be based on City property tax revenues attributable to the incremental increase in value of real and business personal property and can be awarded for up to 50 percent for a period of 10 years as depicted in the following chart: Company Commitment JPotential Grant eal and Personal Property Investment 20 Percent Kard Construction Costs with Fort Worth Contractors 5.0 Percent Pard Construction Costs with Fort Worth M/WBE Contractors 5.0 Percent Overall Employment 10 Percent mployment of Fort Worth Residents 2.5 Percent [Employment of Fort Worth Central City Residents 2.5 Percent tilization of Fort Worth Companies for Supplies and Services 2.5 Percent tilization of Fort Worth M/WBE Companies for Supplies and Services 2.5 Percent OTAL 50 Percent The project is located in COUNCIL DISTRICT 5, Mapsco 302A. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will not increase the total appropriations of City funds. FUND CENTERS: TO Fund/Account/Centers FROM Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Fernando Costa (6122) Originating Department Head: Jesus Chapa (5804) Additional Information Contact: Robert Sturns (212-2663) ATTACHMENTS 1. Victory Packaging Reference Map.pdf (Public) i X X City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 5/6/2014 -Amended M&C C-26736 DATE: Tuesday, May 06,2014 REFERENCE NO.: C-26793 LOG NAME: 17VICTORYEDPACORR SUBJECT: Authorize Amendment of Mayor and Council Communication C-26736 Authorizing Execution of an Economic Development Program Agreement with Victory Packaging, L.P., or an Affiliate to Include Waiver of Certain Development Fees Associated with the Development of a New Production Facility at 15101 Grand River Road in the Centreport Business Park(COUNCIL DISTRICT 5) RECOMMENDATION: It is recommended that the City Council amend Mayor and Council Communication C-26736 authorizing the execution of an Economic Development Program Agreement with Victory Packaging, L.P., or an affiliate to include waiver of development fees associated with development of a new production facility located at 15101 Grand River Road in the Centreport Business Park. DISCUSSION: On March 25,2014,the City Council approved Mayor and Council Communication(M&C) C-26736, authorizing an Economic Development Program Agreement with Victory Packaging, L.P., or an affiliate (Victory Packaging) for the development of a new production facility located at 15101 Grand River Road in the Centreport Business Park. Under the proposed Agreement,Victory Packaging must make at least$12,000,000.00 in real property improvements at the site and install at least$500,000.00 in new taxable business personal property on the premises by June 30, 2015. Victory Packaging must also provide a minimum of 60 full-time jobs in the facility and expend at least$500,000.00 per year for supplies and services at the site with Fort Worth companies, including at least$100,000.00 with Fort Worth certified M/WBE companies. In return, Victory Packaging will receive economic development grants authorized by Chapter 380, Texas Local Government Code, equal to a maximum of 50 percent of the City's taxes on the incremental increase in value of the real and business personal property investment at the site. Staff recommends that the City Council amend M&C C-26736 to also allow Victory Packaging,L.P.,to receive the waiver of the following fees related to the development that would otherwise be charged by the City at any time prior to the June 30, 2015 project completion deadline: (i) all building permit,plan review, inspection, and re-inspection fees; (ii) all zoning fees; (iii) all temporary encroachment fees; (iv) all platting fees; and(v) all fire, sprinkler, and alarm permit fees. All other fees charged or assessed by the City, in accordance with applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, transportation impact fees and water and sewer impact fees, are not waived and shall be fully payable. Although Staff had presented the proposed fee waivers to the City Council during a public presentation on this project, M&C C-26736 did not specifically authorize those fee waivers. This M&C rectifies that oversight. The fee waivers are part of an incentive that the City is authorized to grant for the public purpose of development and diversification of the economy and the elimination of unemployment, as established in Article 3, Section 52-a of the Texas Constitution. All other terms and conditions outlined in M&C C-26736 will remain the same. This proposed project is located in COUNCIL DISTRICT 5, Mapsco 302A. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will not increase the total appropriations of City funds. FUND CENTERS: TO Fund/Account/Centers FROM Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Fernando Costa (6122) Originating Department Head: Jesus Chapa (5804) Additional Information Contact: Robert Sturns (212-2663) Ana Alvarado (212-2680) ATTACHMENTS 1. Victory Packaging_Reference Map.pdf (Public)